Sunday, September 20, 2009

Sheila Olmstead and Robert Stavins argue that three essential elements must be present in the successor to the 1997 Kyoto Protocol:

The essential pillars of a new climate pact, by Sheila M. Olmstead and Robert N.
Stavins, Commentary, Boston Globe: The climate change summit at the United
Nations on Tuesday is aimed to build momentum for ... a successor to the 1997
Kyoto Protocol, which expires in 2012. To be successful, any feasible successor
agreement must contain three essential elements: meaningful involvement by a
broad set of key industrialized and developing nations; an emphasis on an
extended time path of emissions targets; and ... policy approaches that work
through the market, rather than against it.

Consider the need for broad participation. Industrialized countries have emitted
most of the ... man-made carbon dioxide in our atmosphere, so shouldn’t they
reduce emissions before developing countries are asked to contribute? While this
seems to make sense, here are four reasons why the new climate agreement must
engage all major emitting countries - both industrialized and developing.

First, emissions from developing countries are significant and growing rapidly.
... Second, developing countries provide the best opportunities for low-cost
emissions reduction... Third,... industrialized countries may not commit to
significant emissions reductions without developing country participation.
Fourth, if developing countries are excluded, up to one-third of carbon
emissions reductions ... may migrate to non-participating economies through
international trade, reducing environmental gains...

The second pillar of a successful post-2012 climate policy is an emphasis on the
long run..., and major technological change is needed to bring down the costs of
reducing CO2 emissions. The economically efficient solution will involve firm
but moderate short-term targets to avoid rendering large parts of the capital
stock prematurely obsolete, and flexible but more stringent long-term targets.

Third, a post-2012 global climate policy must work through the market rather
than against it. ... One market-based approach, known as cap-and-trade, is
emerging as the preferred approach ... among industrialized countries. ...

Cap-and-trade systems can be linked directly, which requires harmonization, or
indirectly by linking with a common emissions-reduction credit system; indeed,
this is what appears to be emerging... Kyoto’s Clean Development Mechanism
allows parties in wealthy countries to purchase emissions-reduction credits in
developing countries by investing in emissions-reduction projects. These credits
can be used to meet emissions commitments...

A new international climate agreement missing any of these three pillars may be
too costly, and provide too little benefit, to represent a meaningful attempt to
address the threat of global climate change.

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"The Essential Pillars of a New Climate Pact"

Sheila Olmstead and Robert Stavins argue that three essential elements must be present in the successor to the 1997 Kyoto Protocol:

The essential pillars of a new climate pact, by Sheila M. Olmstead and Robert N.
Stavins, Commentary, Boston Globe: The climate change summit at the United
Nations on Tuesday is aimed to build momentum for ... a successor to the 1997
Kyoto Protocol, which expires in 2012. To be successful, any feasible successor
agreement must contain three essential elements: meaningful involvement by a
broad set of key industrialized and developing nations; an emphasis on an
extended time path of emissions targets; and ... policy approaches that work
through the market, rather than against it.

Consider the need for broad participation. Industrialized countries have emitted
most of the ... man-made carbon dioxide in our atmosphere, so shouldn’t they
reduce emissions before developing countries are asked to contribute? While this
seems to make sense, here are four reasons why the new climate agreement must
engage all major emitting countries - both industrialized and developing.

First, emissions from developing countries are significant and growing rapidly.
... Second, developing countries provide the best opportunities for low-cost
emissions reduction... Third,... industrialized countries may not commit to
significant emissions reductions without developing country participation.
Fourth, if developing countries are excluded, up to one-third of carbon
emissions reductions ... may migrate to non-participating economies through
international trade, reducing environmental gains...

The second pillar of a successful post-2012 climate policy is an emphasis on the
long run..., and major technological change is needed to bring down the costs of
reducing CO2 emissions. The economically efficient solution will involve firm
but moderate short-term targets to avoid rendering large parts of the capital
stock prematurely obsolete, and flexible but more stringent long-term targets.

Third, a post-2012 global climate policy must work through the market rather
than against it. ... One market-based approach, known as cap-and-trade, is
emerging as the preferred approach ... among industrialized countries. ...

Cap-and-trade systems can be linked directly, which requires harmonization, or
indirectly by linking with a common emissions-reduction credit system; indeed,
this is what appears to be emerging... Kyoto’s Clean Development Mechanism
allows parties in wealthy countries to purchase emissions-reduction credits in
developing countries by investing in emissions-reduction projects. These credits
can be used to meet emissions commitments...

A new international climate agreement missing any of these three pillars may be
too costly, and provide too little benefit, to represent a meaningful attempt to
address the threat of global climate change.